The average fee charged on fixed rate mortgage deals has increased, according to Moneyfactscompare.co.uk.
The financial information provider said borrowers now have to fork out an average £1,141 for a typical mortgage arrangement fee on a fixed mortgage deal.
This has risen by £46 since March 2023.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Borrowers concerned about rising fixed mortgage rates would be wise not to rush when comparing deals and ensure they consider the overall true cost package, as the average mortgage fee has crept up.
“There is an abundance of deals to suit different needs – some may be headline-grabbing rates, but these can also charge a high upfront fee.
“The best mortgage will come down to how much someone needs to borrow and for how long, so seeking independent advice to crunch the numbers is wise. Those borrowers looking to remortgage right now will find some of the lowest rates will cost them more than £1,000 in a product fee, but a mortgage with a slightly higher initial fixed rate and lower product fee could be a better package based on true cost.”
Fewer incentives
The proportion of the mortgage market offering fixed rate mortgage deals that offer a free or refunded valuation incentive has fallen to 73%, from 75% at the start of March 2023.
Moneyfacts noted that only 44% of fixed rate mortgage deals offer a free or refunded legal fees incentive compared to 45% a year ago.
The proportion of the market offering cashback has dropped by 9% since March 2023.
Springall added: “The majority of the fixed mortgages on the market will offer borrowers a free or refunded valuation incentive, and just under half of all fixed deals will cover legal fees. Just over a third of fixed mortgages on the market do not charge a product fee, and on those deals that do charge a fee, some lenders can allow borrowers to add it to the mortgage advance. These options can save borrowers on the upfront cost of their deal, but it’s vital to be conscious of the true cost of any mortgage before they apply.”
